Bulletins

The long-awaited Brexit agreement was dealt a big blow this past Thursday when two top Brexit officials and four Jr Ministers quit – citing the deal Prime Minister Theresa May reached with the EU was no good.

What does it mean for housing?

The U.S. Dollar, U.S. Bonds and home loan rates benefitted from the Brexit chaos as global investors parked their money in the relative safety of U.S. Dollar denominated assets (currency and Bonds) in what is called a “safe-haven” trade.

The U.S. Dollar had already been rising in value versus other global currencies and there are a couple of effects worth following:

A strong U.S. Dollar tamps down inflation as it lowers commodity prices like oil. Have you noticed the recent price decline of gas at the pump? This is like a tax cut for the consumer looking to purchase a home.

It makes U.S. imports cheaper. This along with lower oil keeps inflation down, which is good for long-term rates like mortgages.

If the U.S. dollar strengthens further, the Fed may not raise rates as expected in 2019 because more hikes would further suppress inflation, which is already tame – again, good for home loan rates.

Bottom line – rates have improved from the worst levels of the year and it is quite possible that the highest rates of the year are behind us.

New Program Gives Originators a Distinct Advantage in the Market

ANAHEIM, Calif. (Nov. 19, 2018) — Carrington Mortgage Services, LLC (CMS), one of the nation’s largest privately held non-bank lenders, today announced the launch of its Correspondent Lending Division. The addition of the Correspondent channel complements CMS’s full portfolio of loan origination channels, which includes Wholesale and Retail.

“We have diligently built the Correspondent Division for success, and we’re now ready to hit the ground running,” said Ray Brousseau, President of CMS. “We’re committed to delivering a high level of transparency and timeliness to the non-delegated correspondent lending process. We understand that it’s all about providing our originators with the ability for further growth and profitability.”

CMS’s diverse product offering is designed to meet the needs of today’s non-delegated originators, and includes conventional Fannie Mae and Freddie Mac products, FHA and VA products, and Carrington’s proprietary Flexible Advantage™ Products which have been developed specifically to meet the needs of underserved borrowers.

“CMS has a proven track record of customer-centric service, combined with quick turn-times for underwriting and purchasing closed loans,” said Greg Austin, EVP of Lending for CMS. “Our non-delegated channel is committed to helping correspondent lenders increase their business by delivering products that allow them to work with borrowers in the underserved and non-QM markets. We also provide exceptional support for borrowers after the sale, and currently service over $60 billion in loans.”

The Carrington Mortgage Services, LLC – Wholesale Lending Division Offices and Lock Desk will be closed Thursday, November 22, 2018 and Friday, November 23, 2018 in observance of Thanksgiving, which is a federal holiday. Due to the holiday, the Lock Desk will be closing early on Wednesday, November 21, 2018 at 11:00 AM PST (early market closure of 2:00 PM EST). Normal Lock Desk hours will resume on Monday, November 26, 2018.

Locks that expire on the holiday will automatically roll to the next business day. In addition, there are some important disclosure considerations associated with the holiday:

Thursday, November 22, 2018 cannot be included in the rescission period for refinance transactions.

Thursday, November 22, 2018 cannot be included in the seven (7) business day waiting period between the date the initial Loan Estimate (LE) was provided to the borrower and the consummation of the loan.

When re-disclosure of the LE is required, Thursday, November 22, 2018 cannot be included in the four (4) business day waiting period between the date the revised LE was provided to the borrower and the consummation of the loan.

When re-disclosure of the CD is required, Thursday, November 22, 2018 cannot be included in the three (3) business day waiting period between the date the revised CD was provided to the borrower and the consummation of the loan.

Carrington will be exhibiting at NAMB National, December 8th-10th. Join us at Caesars Palace in Las Vegas, Nevada and stop by booth #906-907 to meet our knowledgeable Wholesale team. Find out how your go-to-lender for the toughest loans is also your one-stop shop to help pump up your pipeline with everything from Government to Conventional and flexible home loans solutions for the underserved and Non-QM markets.

Join us on December 8th from 3:00 pm – 3:50 pm in the Emperors Ballroom 2 and get the scoop on how Non-QM loan products can make a real difference in increasing your pipeline. We’ll explain some of the identifying factors for who fit the Non-QM mold, including those who are self-employed.

Hosted by industry veteran Amy Marsh, Business Development Manager for Carrington Wholesale Lending.

Carrington Mortgage Services (CMS) offices, including the Lock Desk, will be closed Monday, November 12, 2018 in observance of Veteran’s Day, which is a Federal Holiday. Normal Lock Desk hours will resume on Tuesday, November 13, 2018.

Locks that expire on the holiday will automatically roll to the next business day. In addition, there are some important disclosure considerations associated with the holiday:

Monday, November 12, 2018 cannot be included in the rescission period for refinance transactions

Monday, November 12, 2018 cannot be included in the seven (7) business day waiting period between the date the initial Loan Estimate (LE) was provided to the borrower and the consummation of the loan

When re-disclosure of the LE is required, Monday, November 12, 2018 cannot be included in the four (4) business day waiting period between the date the revised LE was provided to the borrower and the consummation of the loan

When re-disclosure of the Closing Disclosure (CD) is required, Monday, November 12, 2018 cannot be included in the three (3) business day waiting period between the date the revised CD was provided to the borrower and the consummation of the loan

Last Week in Review:
Rates hit seven-year highs midweek on the heels of a confusing Fed message.

Our Federal Reserve has a dual mandate – to maintain price stability (inflation) and maximum employment. They also have a 3rd “unstated” mandate, which is to maintain market calm.

This past week, the Fed came up a bit short on that “unstated” mandate and created quite a bit of confusion and market turmoil midweek upon releasing the Minutes from the Sept 26th Fed meeting.

In that meeting we learned there is a group of “hawkish” Fed Members that want to hike the Fed Funds Rate more aggressively into 2019. At the same time, there were other Fed members who think the current Fed Funds Rates is “about right” – meaning no more hikes for now. The Fed talking out of both sides of their mouth was a source of confusion for the markets and home loan rates.

Adding to the confusion is the Fed’s very own inflation forecast which suggests inflation will remain close to current levels through 2021. If we recall the Fed mandate to maintain price stability, one could argue there is no need to raise the Fed Funds Rate if inflation is not rising.

Food for thought – If the Fed’s modest inflation forecast comes to pass, we will likely see home loan rates remain near historically attractive levels.

Last Week in Review:Rates were higher early in the week – but improved on the heels of a soft Consumer Inflation reading and rout in Stocks.

When following the direction of interest rates, one only has to follow the direction of inflation. If inflation is moving higher, rates are going higher. The opposite is also true.

Lately, there has been a growing fear that inflation is threatening to rise due to our tight labor market, strong economy and rising wages. It was this fear that pushed rates higher over the past month, culminating with rates hitting their highest level in over 7 years this past Tuesday.

But come Thursday – the bond market had reason to breathe a sigh of relief and rejoice when the September Consumer Price Index (CPI) was reported lower than expectations. Remember – low inflation is good for the bond market and home loan rates.

It was just last month that Fed Chairman Jerome Powell and the Fed forecasted consumer inflation to remain near current levels through 2021. If this comes to pass, long-term rates like home loan rates can’t rise too much.

Also helping rates improve from the worst levels of the week was a 1,400+ point selloff in Stocks between Wednesday and Thursday. Generally speaking, when investors sell Stocks they park some of those investment dollars into Bonds.

Bottom line – home loan rates, while elevated since earlier this year, remain historically low…especially when you consider how well our economy is performing.

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This information is provided for your convenience and Carrington Mortgage Services, LLC makes no warranties concerning the accuracy or completeness of any of the information. This is not financial or legal advice and should not be taken as such. This information is for mortgage professionals only and is not intended for distribution to consumers.